Which version of windows are you using. It looks like a standard MBR install so what's the problem, what happens when you try to install. You are usually better off leaving unallocated space to install to. During the installation, you will need to format the partition on which you want to install Ubuntu so there's no point creating a partition from windows because it can't format with a Linux filesystem.
Do you have windows hibernated? Turn off any reference to hibernation for starters and explain the problem.
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